Eight property-casualty insurers dominate the market for insurance coverage in most hurricane-prone states, according to Weiss Ratings.
Those eight carriers controlled up to 77.2% of the market in most of those states, according to the analysis.
Florida, which is among the states most likely to suffer during hurricane season, running from June 1 to Nov. 30 each year, fares much better because of recent reforms. The eight companies control38.4% of the market share, according to Weiss Ratings.
“After consecutive years of devastating storms across Florida, several insurers have entered the market, seeking to capitalize on shrinking capacity,” said Melissa Gannon, vice president of Weiss Ratings, in a statement. “But while the risk has now been spread among more players, the financial strength of the new entrants is questionable, and consumers must monitor the health of the insurer they select, especially in light of the forecast for another active hurricane season.”
In particular, many start-up companies that received policies from the state-run insurer in recent years are financially unstable. For example, Royal Palm Insurance Co. and Edison Insurance Co., which opened for business in 2006, are rated E+ (Very Weak), while Peoples Trust Insurance Co., which began operating in 2008, is rated D- (Weak), according to Weiss.
In Texas, eight carriers commanded 77.2% of the homeowners insurance market at year-end. In South Carolina, they held 68.2% of the market; in Louisiana, 63.3%; and in North Carolina, 61.1%, compared to 78.3%, 66%, 62%, and 58.5%, respectively, in 2002.
Weiss said the insurers with the greatest share of hurricane-prone states’ markets include State Farm Mutual Automobile Insurance, Allstate Corp., Zurich Financial Services, USAA Insurance Group and Citizens Property Insurance.